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This is the demonstration of the "Motion Portlait" technology.
They say that the technology will be intorduced in the conversation system in the PSP game
"Suzumiya Haruhi no Yakusoku": http://b.bngi-channel.jp/psp-haruhi/

According to the avobe page, Motion Portlait was consist of three key features:
1.3D model is generated from a single 2D image automatically.
2.Engine draw real-time image of portlait responding to input from the user.
3.Engine has also the capabilities of drawing emotions of the character.

That Flash demo is definitely impressive. Quite a number of layers to get that kind of result in Flash, huh? This sure beats watching "Tachies" (Static Poses) all the time but they have their own good points. More detailed art for example.

According to Bandai, the companies main focus at the upcoming Tokyo Game Show, will be Suzumiya Haruhi no Yakusoku (The Promise of Suzumiya Haruhi) on the PSP.
Bandai are saying that thier stage event will focus mainly,if not soley on the game to promote it as much as possible.
To think, Bandai already have a large proportion of the Otaku population in thier grasp due to the influx of Gundam games spewing out of the company. Making a Haruhi game should make them even more popular.
Suzumiya Haruhi no Yakusoku is set to be released on Japan on December 20th. Like Suzumiya Haruhi no Tomodai on the PS2, it will be released alongside a Limited Edition Version.
The Limited Edt. Version will come with a figure,PSP stand,Headphones,PSP Sock, and some other stuff I can't remember >.<

Haruhi PSP Adventure Game's Promotional Movie Posted
Bandai Namco Games has posted a promotional movie (500KB or 1MB bandwidth) for the Japanese PSP adventure game Suzumiya Haruhi no Yakusoku (The Promise of Haruhi Suzumiya) with short clips of the gameplay and the Motion Portrait character animation system. The video, which is playing at Japanese retail stores, notes that the Haruhi Suzumiya franchise has sold over 800,000 anime DVDs, over four million copies of the original novels, and over one million copies of the manga volumes. In this game, the player interacts with the various members of the SOS Brigade in simulated conversations. Source: Moon Phase

PS2 Adv game based on the Anime with dating sim elements included eh? I guess it goes without saying that you would most likely be playing as Kyon. Not a bad idea at all but instead I think it would be much more interesting if you were to play as a exclusive main character, and you could interact with everyone with this new "mysterious" main character.

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Anime in progress and enjoying:Persona 4 the goldenAnimes on Hold:NoneAnimes completed:I wanna be the strongest in the world,Super Sonico The Animation, Hajime no Ippo:Rising, Wake up girls,Mangaka-san to Assistant-san to The AnimationAnime evaluating:NoneManga in progress:None at the moment